This is a rush transcript from "FOX News Sunday," November 25, 2007. This copy may not be in its final form and may be updated.
CHRIS WALLACE, HOST: I'm Chris Wallace and this is "FOX News Sunday."
The Republican race for president took a surprising turn right here last spring.
(BEGIN VIDEO CLIP)
WALLACE: Question: Are you considering running for president in 2008?
FRED THOMPSON, FORMER U.S. SENATOR: I'm giving some thought to it. Going to leave the door open.
(END VIDEO CLIP)
WALLACE: Now, eight months later, Fred Thompson is running hard. In a Sunday exclusive, we'll find out what he's learned and what he needs to do to win the nomination, as we continue our series, Choosing the President.
And, Senator, welcome back to "FOX News Sunday."
THOMPSON: Thank you. Good to be with you.
WALLACE: Your campaign tells us you have a new tax plan you want to unveil today. What is it?
THOMPSON: Yep. Yep. It's maintaining the tax cuts that we had in 2001, 2003. It's eliminating the death penalty. It's reducing the corporate tax rate.
We have the second-highest corporate tax rate among our competing partners. It's hurting us competitively. We're probably losing revenue from it.
We have several other provisions in it, but another major one is an adoption, basically, of the approach that the House Republican study group has that would give taxpayers an option of continuing to file the way they do now or filing under a flatter plan where you only have two rates, but no exemptions past the personal exemption and no deductions.
So give that a try. And it would be a major move toward tax reform, which I think is greatly needed.
WALLACE: Now, one thing that you also do is you repeal the alternative minimum tax. It obviously...
WALLACE: There's concern about the fact that now, because there's no indexing, that middle class families who weren't supposed to fall under the AMT are now being hit, but you're going to get it for rich people as well. Why repeal it for everyone?
THOMPSON: Well, it was a tax that never was supposed to be imposed on anybody except about 155 taxpayers, and now we're seeing about 23 million taxpayers.
At the current rate, the AMT will be collecting more tax revenue than the regular tax system. So what we're saying is that let's index it from year to year until we get a handle on spending, and then we'll eliminate it.
The government wasn't supposed to get that revenue in the first place, and it will not be the drag on the economy that I think higher taxes would be.
We're facing, after the end of 2010, a situation where a lot of revenue under current circumstances is going to fall right into the hands of the government.
Taxes are going to be high without anybody having to do anything — automatic AMT increase, including millions of people who were not originally intended to be covered, income tax rates going up substantially for just about everybody in America. And that's bad for the economy.
We've known for years any time we have lowered taxes and any time we've lowered tax rates, we've seen growth in the economy. Growth is the fundamental underlying factor that we have to maintain in order to be able to generate the additional tax revenue that we're going to need in order to be fair to the American people.
WALLACE: But we've also got to pay for our government. We went over your plan yesterday, crunched the numbers, and the best we could figure, it would cut federal revenue by more than $2.5 trillion over the next 10 years. That's roughly 10 percent of the government's budget per year.
So how would you cut federal spending to offset this huge revenue loss? And be specific.
THOMPSON: Well, I will be specific. But first, I'll say I hope your estimates are better than the professionals who estimated that we would get so much less in capital gains revenue if we lowered the capital gains rate. They were totally wrong about that.
They were wrong as to the amount of tax revenue we would lose under the 2001 tax rate cuts also. They always overestimate the losses to the government.
We had one day in April this year where the government took in more tax revenue than any single day in the history of the country. So that's always missed...
WALLACE: All right. But you are going to have to...
THOMPSON: ... by the experts.
WALLACE: So give us three specific things you would...
THOMPSON: Well, let me give you one big one...
THOMPSON: ... that's worth about $4.7 trillion — my Social Security plan. I have put out a Social Security plan, the only one among the Democrats or Republican contenders, that basically faces up to the fact that Social Security is going bankrupt and we're going to have to do something about it.
The comptroller, every economic expert who's looked at it, says that it's unsustainable. And indeed, it is. We're going to be going into the red in 2017. It gets worse from there.
I put out a proposal to save Social Security and save money for the government at the same time and allow individuals to set forth 2 percent of their payroll into a private personal account, with the government matching that.
In the long run, the government would come out ahead. A person would have a nest egg at the end of his retirement time.
And if you do that in conjunction with indexing the initial Social Security benefit to inflation instead of wages, at the end of the day you're going to save Social Security. You're going to put it on a sustainable basis.
A lot of experts have already looked at it and, I think, come to that conclusion. The National Review has reported on it. Investors Business Daily has reported on it. The Washington Post has analyzed it.
And it will save the government $4.7 trillion at the end of the day. So eventually you do have to address the spending side, but the spending is going to have to be addressed on the basis of our entitlement difficulties.
WALLACE: Let's talk about another subject. Last week you were endorsed by the National Right to Life Committee, but you oppose a constitutional ban on abortion. You say you'd like to see it the way it was before Roe vs. Wade, with the decision up to states.
Let's take a look at what one of your rivals, Governor Huckabee, had to say about that. Here it is.
(BEGIN VIDEO CLIP)
MIKE HUCKABEE, FORMER ARKANSAS GOVERNOR: It's the logic of the Civil War. If morality is the point here, and if it's right or wrong, not just a political question, then you can't have 50 different versions of what's right and what's wrong.
(END VIDEO CLIP)
WALLACE: Senator, I'm going to give you a chance to respond to that in just a second, but let me ask you two yes or no questions first. Do you believe that life begins at conception?
WALLACE: Do you believe that abortion is the taking of life?
WALLACE: So why leave it up to the states where, as you well know, before Roe vs. Wade, some states allowed abortion on demand?
THOMPSON: Well, in the first place, I guess over the next few weeks, we'll have an opportunity to analyze Governor Huckabee's statements. He supported the same thing that I've been saying as late as last year, a couple years ago — said leave it up to the states, essentially.
What the situation is now is as follows. Because of Roe vs. Wade, all states are restricted from passing rules that they otherwise would maybe like to pass with regard to this area. If you abolish Roe vs. Wade, you're going to allow every state to pass reasonable rules that they might see fit to pass.
When we had control of the House, had control of the Senate, had control of the presidency, there wasn't a serious effort to put forth a constitutional amendment because people knew that it couldn't pass — couldn't pass, wouldn't pass.
What I've been talking about is directing our energy toward something that was halfway practical, something that might could get done. That has to do with federal judges. It has to do with the Supreme Court. It has to do with Roe vs. Wade.
So now where we have no states with the option of doing anything about it, then we would have however many states wanted to. You could move from zero yard line, you know, to the 60- or 70-yard line instead of standing pat, which is what we're doing how, which is where we will remain if we don't abolish Roe vs. Wade.
WALLACE: But, Senator, I want to put up something that you said two weeks ago, and here it is. "I think people ought to be free at state and local levels to make decisions that even Fred Thompson disagrees with. That's what freedom is all about."
WALLACE: ... that is the essence of the pro-choice argument, not individual choice, but pro-choice for states.
THOMPSON: No, not really. I mean, how many pro-choice people say that they want to see the abolition of Roe vs. Wade? I don't know any.
What I'm talking about is abolishing Roe vs. Wade. If you can't carry the...
WALLACE: But you're saying that states — even if you disagree with them, states could have abortion on demand.
THOMPSON: No, not abortion on demand. They could restrict. They would have the ability to restrict abortion more than they do now. They have limited...
WALLACE: But, Senator, pre-Roe vs. Wade, some states had abortion on demand. Here in D.C. they had it.
THOMPSON: Well, they would not have anything under that situation that they don't have now. I mean, the gain would be on the pro-life side. I mean, they have Roe vs. Wade and all of the progeny from that already.
WALLACE: But you'd allow states to have abortion on demand.
THOMPSON: I don't know of any states that have abortion on demand. Perhaps they do. But what I'm saying is if Roe vs. Wade passed, let's just say hypothetically...
WALLACE: You mean if you reverse Roe vs. Wade.
THOMPSON: I mean reversed it. Let's just say hypothetically that some states did that. You'd have an awful lot of other states that are restricted by Roe vs. Wade now. They could place restrictions on abortion that they can't do now.
I mean, you'd be making substantial progress. Ultimately, do I think a state ultimately has to have the right to maybe do something that I would disagree with? If you can't carry the ball in those states, yes. Yes. There's no question. We live in a democratic society.
But if we can't carry the argument, if we can't win the argument, which I think that we are winning nationwide now, we can never pass a constitutional amendment anyway.
We sit here and talk about the ideal which would be a constitutional amendment, two-thirds of the Congress, three-fourths of the states, and are basically saying that we could get that done, but we can't go state by state and win this argument?
I believe that's wrong. I think we could make substantial progress. And Governor Huckabee agreed with that same position until he started running for president.
WALLACE: Let me ask you about Governor Huckabee, because as you well know, I'm sure, he has moved past you in the polls in Iowa, especially among social conservatives.
You said recently that people don't know Huckabee's record and, quote, "that will be cured shortly." So help us out. What don't we know about Mike Huckabee?
THOMPSON: The process will cure it for all of us soon. And he'll be a part of that. Of course, his record will be examined. His record will be — well, one of the things I just mentioned. I mean, he's talking about Roe vs. Wade and all of that and, you know, it's directly contrary to what he said in the past.
Taxes. The Cato Institute gave him a "D" rating, which is the same rating they gave Bill Clinton with regard to taxes. He was a very high tax governor. They gave him an "F" the last two years that he was there.
He did everything he could as governor to keep the state legislature from restricting illegal immigration. He was for taxpayer-funded scholarships, for illegal immigrants. He objected when they were arrested and things of that nature.
So on immigration he's, again, different from where he says he is today. So all those things will be examined, you know, over the next few weeks in a little bit more detail. That's the reward you get for doing well in a poll. That happens. Happened to me and happened to everybody else.
WALLACE: Meanwhile, Rudy Giuliani has fired back at your criticism that he talks too much about New York City. Let's take a look at that.
(BEGIN VIDEO CLIP)
RUDY GIULIANI, FORMER MAYOR OF NEW YORK: Well, Fred has no record to talk about, so — I have a good record to talk about. And if he had no record at all, he'd want to attack somebody else's record, which is what I think some of my opponents are doing.
(END VIDEO CLIP)
WALLACE: Giuliani says you attack people with a record because you don't have one.
THOMPSON: I think Rudy was kind of squealing before he got stuck there. Somebody asked me a question about gun control, and I said Rudy was mayor of New York and apparently felt like gun control was a great idea back then.
He says it was because he was representing New York. But I don't think New York necessarily — New York City has necessarily the same values as the rest of America. And that's in reaction to that.
My experience has had to do with matters on the federal level, national level. I was on the Intelligence Committee. I chaired a committee dealing with nuclear proliferation. I was Republican floor leader for the homeland security bill.
I stopped an export legislation bill that I thought was too generous to China with regard to dangerous dual-use items. You know, I could go on and on and on.
I've dealt with those issues for almost a decade both in and out of government. And of course, Rudy has not, you know, five minutes of experience with regard to things of those nature.
So you know, we all have our assets. You know, we all have things that we can brag on. But when you say experience, the question is experience doing what.
WALLACE: I want to talk — we have a couple of minutes left — about your situation in the polls, because there is a buzz out there, and you know it, that your campaign has been disappointing.
And we have a poll that shows that you've actually dropped 10 points in the latest Fox News national poll since you came in in September. But it's not just the numbers.
THOMPSON: Well, you know how...
WALLACE: Well, can I just — may I just finish my question? Then you can say what you want. It's not just the numbers. I want to show you what two conservative commentators had to say about your campaign this week. Here it is.
(BEGIN VIDEO CLIP)
FRED BARNES, WEEKLY STANDARD: It's the wrong message and a weak messenger. Other than those two things, it's a great campaign.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
CHARLES KRAUTHAMMER, COLUMNIST: Thompson offers the folksy manner of a consistent conservative, but there's not anything there. And in the absence of something, he can't win.
(END VIDEO CLIP)
WALLACE: Senator, I suspect you've gotten a few bad reviews for movies or T.V. shows in the past, but that's pretty tough stuff. How do you respond?
THOMPSON: Yes. It's a lot of the same kind of stuff that I heard when I first ran for office, when I was 20 points down. And fortunately, I wound up 20 points ahead on election night.
This has been a constant mantra of Fox, to tell you the truth. And I saw the promo for this bill, and I think it was kind of — for this show, and it was kind of featuring the New Hampshire poll.
Let's put things in context a little bit, to start with.
WALLACE: Well, I don't know that —— I mean, I don't know that Fox has been going after you, and I certainly don't think Charles Krauthammer and Fred Barnes...
THOMPSON: From day one, they said I got in too late, I couldn't do it.
WALLACE: But there were a lot of people besides Fox who said that, sir.
THOMPSON: Well, but I'm — these are the two you used.
THOMPSON: All right. Well, they said I got in too late, couldn't do it...
THOMPSON: ... wouldn't raise enough money, and that sort of thing. And that's their opinion. They're entitled to their opinion.
But that doesn't seem to be shared by the cross-section of American people. If you look at the national polls, you'll see that I'm running second and have been running second for a long time.
I'm running ahead of a guy who spent probably $50 million more than I have and been running for a year longer. If you look in South Carolina, I've either been leading or tied for the lead for a long, long time. I moved from fourth to third in Iowa, ahead of Rudy Giuliani, incidentally.
So you know, they're entitled to their opinion, but for you to highlight nothing but the negative in terms of these polls, and then put on your own guys, who have been predicting for four months, really, that I couldn't do it, you know, kind of skews things a little bit.
There's a lot of other opinion out there. National Review that I...
WALLACE: Do you know anybody who thinks you've run a great campaign, sir?
THOMPSON: It's not for me to come here and try to convince you that somebody else thinks that I've run a great campaign.
WALLACE: Well, but that's why I...
THOMPSON: I'm talking about — no, let me ask you...
WALLACE: ... I'm just asking you the question.
THOMPSON: ... you know, you mentioned conservatives. Would you say National Review was a conservative magazine and a conservative...
WALLACE: As are Fred Barnes and Charles Krauthammer.
THOMPSON: They said that — well, that just goes to show you there's more than one opinion.
THOMPSON: You're showing one. I'm giving you the other.
WALLACE: Well, I'm asking you for the other. That's the point.
THOMPSON: Well, I'll give you an answer. They said that I had set the standard for policy in this campaign.
They pointed out that I had laid out all these policy positions as far as immigration is concerned, as far as the military was concerned, the only policy position in Social Security, and others, and said they wish the other candidates would do half as well as I have.
Investors Business Daily has pointed out that I have the solution on the Social Security plan that no one else has put forth that will solve a major financial problem that we're going to have in this country.
And as I go around the country, I get that kind of reaction. Now, other than opinion, which — everybody's got one, the only thing I know to look at is the polls.
And if you get past New Hampshire and look at some of these other states — states that I'm leading in in the south, for example — and straw polls that I've won, endorsements that I've got — I've got more endorsements in the state of Georgia than all the other candidates put together.
So I understand the game of build-up and I understand the game of take-down. And we all go through it. And I'm perfectly willing for you to do that with regard to me as you do the other candidates.
WALLACE: I was going to say, Senator...
THOMPSON: But you have the right to put in your one side, and put in the Fox side, and I have the right to respond to it. And thankfully, you've given me that opportunity.
WALLACE: I was going to say, Senator, I'm glad I asked the question, because I got a heck of an answer.
Thank you for coming on. Thanks for talking with us.
THOMPSON: Thank you. Appreciate it.
WALLACE: Please come back, sir.
THOMPSON: Thank you very much.
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